Saturday, April 1, 2017

Every Penny Counts

I am an advocate of saving every penny that my fingers can grab. Why? Because it all adds up. My grandma use to pickup all the money that people would drop and just abandon. The were quarters, dimes, nickles and even pennies. When she got home she would add it to a jar that she kept in the kitchen cabinet. The question is why did she do that. Why? She understood the value of money.

Growing up she lived through some of the most difficult times of the last 100 years. She was born in 1917 which was during the latter half of World War I( July, 1914 - November, 1918). By the time she turned 12 year old the world was plunged into the Great Depression (1929 - 1939). Immediately as the country was pulling out of the great depression the world was once again facing conflict which became known as World War II (September, 1939 - September, 1945). For the first 28 years of her life she lived in at world that was unstable and in turmoil. The people that grew up during these times learned to appreciate the value of money. Will never forget this ritual of hers.

Today, most people will walk down the street or through a parking lot and not even give a second consideration for a penny that would be laying on the ground. To them the effort that it takes to reach down is not worth it, but let's look at the numbers. If you picked up a single penny every day and at the end of every month you deposited this "free" money into a savings account that earned .25%, (today's going rate), and you did this for 30 years, you would have $177.68 of free money in your account. This number includes $68.18 interest, all of which is free money. As I have stated in previous postings, I am not taking into consideration taxes. I do this to drive home the value of compounding and the fact that the tax rates for everyone is different. There are also investments that can be made to minimize the amount of taxes that you will be charged. Work with your accountant or fiduciary to find the best values for your money.

That is with just $.01 per day for 30 years. What if we found on average $.10, $.25, $.50 or even $1.00? Just in interest here are the numbers. If you are running around with the mindset that the pennies do not count. You will lose out and where will it end? As your income increases might start adopting ideas that since I make a $100,00 a year that extra dollar a day is not going to make a difference. Now you graduated from a penny to a dollar. How will you think when you are making $200,00, $500,000 or $1,000,000?

If you lose touch with the value of the penny where does it end? In your financial life you might lose value of other monetary denominations. If you are in business you might not find the value in a job that is not over a particular dollar amount. Where will it end? Every penny counts and every penny is building a value system in your life that covers not just money but also can bleed into other decisions that you make in your personal and business lives.

Everything that I write are the results of my own research. I strive to provide the most accurate information possible and cannot be responsible for any errors. I am not an accountant or a fiduciary. Before investing or using any of my ideas it is advisable to consult a financial professional. I am not responsible for any financial loss that might occur through the use of my ideas. Do your own research and come up with your own answers. The examples that I provide are just that, examples and are meant only for the purpose of teaching cash flow and ideas for possible investments.